Hildegarde Naughton (Galway West, Fine Gael) | Oireachtas source

I congratulate Deputy Currie on a personal level on her election in Dublin West. I know how passionate and hard-working she is. It is great to see her rewarded and sitting in Dáil Éireann today. I know her family are very proud and, in particular, I know her father would be very proud of what she has achieved. I look forward to working with her. I am taking this Topical Issue on behalf of the Minister, Deputy Foley, and I will raise the issues Deputy Currie has raised directly with the Minister. They are very important for us as a Government and we look forward to working with Deputy Currie.

I thank Deputy Currie for raising this very important issue and for offering me the opportunity to respond. I know from her time in the Seanad, and now representing the constituency of Dublin West in the Dáil, that the cost of childcare is one she has been raising consistently and one she is very passionate about. By way of background, core funding represents a significant increase in income for services and allowed for the introduction of the fee management system in line with the recommendations of the expert group in the Partnership for the Public Good report.

The first step in introducing fee management was to limit increases in fee rates, which in years one and two was effectively a fee freeze, whereby providers could not increase the fees charged from September 2021. Core funding has allowed for substantial increases in the total cost base for the sector, related both to pay and non-pay costs, thereby creating the conditions for this. This effective fee freeze ensured the increases to the national childcare scheme universal subsidy in 2023 were fully felt by parents in corresponding reductions in out-of-pocket costs.

In recognition of the notable difference in fees charged across the sector, and given that some services may have been operating with a fee that was not sufficient to sustain the business, even with increased State investment through core funding, a fee increase assessment process was introduced in year three of the programme. The fee increase assessment process balanced the need of parents for stability in their early learning and childcare costs and the need for providers to operate viable businesses in order to continue providing this public good service for their community.

The fee increase application process opened on 31 July 2024. Only services charging fees below the average in their county were eligible to apply. There was an assessment to ensure there was a demonstrable need for a fee increase before approval was granted. Where a demonstrable need to increase a fee was confirmed, the resulting increase did not exceed 74 cent per hour, and the maximum weekly increase was €33.30, which was equivalent to the increase to the national childcare scheme subsidy from September 2024. For example, a place offering 45 hours was eligible for a maximum increase of €33.30 while a place offering 20 hours was eligible for a maximum increase of €14.80. The process closed for applications on 29 November 2024. Only services charging low fees, those being fees below the average in their county, were eligible to apply. For example, if a service offered five fee options and one fell below the county average, only the one fee below the county average was eligible to enter the assessment process. The onus was on the provider to demonstrate a need for a fee increase.

Where parents may be seeing an increase in their fees as a result of this process, those in receipt of the universal subsidy, for example, will not see an increase in out-of-pocket costs compared to this time last year because of the maximum increase allowable under the process. For parents on the universal subsidy using the full hours offered, fees are not increasing beyond the level charged in September 2022, when core funding was introduced. These parents will have been paying some of the lowest fees in the country. As well as the fee increase process, a cap on fees was introduced for services joining core funding for the first time in the third year. A fee cap will apply to all services in core funding from September 2025. This change will improve affordability for parents, as very high fees will be reduced.

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